Can someone please advise me on how to handle the accrual of interest on shareholder loans made TO a corporation? The shareholder has loaned the corporation money for the past several years. There is a promissory note for each loan with a stated rate of interest and a repayment plan. However, no interest has been accrued/expensed/repayed to the shareholder since the very first loan was made several years ago. Also, no loan repayments have been made. How should I go about accruing interest in the books for prior periods? Is this shareholder at risk for having his loans reclassified to equity? How would you handle this situation moving forward?